EANS-News: Kommunalkredit Austria AGresults for 2016

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annual report
Steinbichler: "A highly positive year after privatisation"
Kommunalkredit Austria AG reports its results for 2016
* IFRS profit after tax of EUR 49.0 million
* Continued strengthening of equity base: total capital ratio 42.3%;
common equity tier 1 ratio 32.9%
* No credit defaults in 2016
* Positive development of business expected for 2017
(Vienna, 10 March 2017) - In 2016, the first full business year after its
privatisation, Kommunalkredit Austria AG (Kommunalkredit) generated an IFRS
after-tax profit for the year of EUR 49.0 million. The bank holds a loan
portfolio of high asset quality without a single default in the reporting year,
and its capital base was further strengthened in 2016: the total capital ratio
increased to 42.3% and the common equity tier 1 ratio to 32.9%. Customer
deposits increased from EUR 9.0 million to EUR 210.8 million in the course of
the year. The bank generated new business in a volume of EUR 242.6 million.
As Alois Steinbichler, CEO of Kommunalkredit, notes, "The first full business
year after privatisation in the autumn of 2015 was very successful.
Kommunalkredit generated solid results in 2016. With our excellent
capitalisation and our clearly defined business model, we are very well
positioned as a specialist bank in the fast growing market of infrastructure
finance."
Strategy and development of business: Kommunalkredit acts as a bridge
As a bank specialising in infrastructure finance, Kommunalkredit acts as a
bridge between infrastructure developers, such as municipalities, public-sector
enterprises or private project operators, on the one hand, and institutional
investors, such as insurance companies or pension funds, on the other hand.
Kommunalkredit meets the complementary interests of both side: While
infrastructure developers require structuring and financing solutions, investors
are increasingly looking out for asset classes with stable cash flows in the
long term. Kommunalkredit's focus is on projects in the areas of energy and the
environment (especially sustainable sources of energy), social infrastructure
(care homes, health care and educational facilities, administrative buildings)
and transport (commuter transport, road and rail transport). With its business
model, the bank is able to use the opportunities offered by the infrastructure
market. According to estimates by the European Commission, capital expenditure
in a volume of EUR 150 billion to EUR 200 billion per year will be required to
reach the targets of the Europe 2020 strategy. In Austria, too, major
investments will have to be made in the coming years.
In 2016, Kommunalkredit played a leading role in the financing of numerous
infrastructure projects in European core countries. These projects included wind
farms in France, the North Sea and Austria, a broadband network in Germany, a
toll road in Spain, road infrastructure, including road lighting, in a large
city in Great Britain, and the administrative headquarters of a German
government ministry. Overall, Kommunalkredit generated new business in a volume
of EUR 242.6 million in 2016; the prolongation of loans in its existing
portfolio accounted for another EUR 64.5 million.
Income position: IFRS after-tax profit for the year of EUR 49.0 million
In 2016, Kommunalkredit generated an IFRS after-tax profit for the year of
EUR 49.0 million. A comparison with 2015 is of limited value, as the previous
year's figures only cover the abridged business year from the date of
privatisation on 26 September 2015 to 31 December 2015.
Kommunalkredit reports net interest income of EUR 36.5 million and net
commission income of EUR 16.8 million; net general administrative expenses
amount to EUR 38.5 million. Thus, the bank's operating result comes to
EUR 15.4 million. Its net trading and valuation result of EUR 36.2 million
comprises income from the early redemption of own issues and the resulting
closure of hedging transactions, as well as valuations of the fair-value
portfolio.
In 2016, Kommunalkredit contributed EUR 2.5 million to the Bank Resolution Fund
and paid EUR 11.6 million in stability tax ("bank levy") under the Stability Tax
Act. In addition to the current stability tax for 2016 of EUR 3.9 million, this
expense item also comprises the non-recurrent special payment of EUR 7.7 million
pursuant to the 2016 Tax Amendment Act. After this special payment, the
financial burden resulting from the recurring stability tax payable for 2017
will be significantly reduced (expected stability tax expense in 2017:
EUR 0.7 million). The tax result for the reporting period is positive at
EUR 13.5 million due to the capitalisation of tax losses carried forward.
The Annual Shareholders' Meeting on 10 March 2017 decided to distribute a
dividend in the amount of EUR 32.0 million. Thus, Kommunalkredit's equity, after
distribution of the dividend, increased by EUR 40.5 million to
EUR 296.8 million. With the intention of supporting future growth, the
Shareholders' Meeting also decided to grant authorized capital in an amount of
EUR 79.7 million.
Balance sheet structure: Strengthened capital base and higher customer deposits
As at 31 December 2016, Kommunalkredit's consolidated total assets according to
IFRS amounted to EUR 3.8 billion, down by EUR 0.4 billion from EUR 4.2 billion
as at 31 December 2015. The reduction is primarily due to the runoff of asset
positions and the elimination of derivative transactions. The bank's total
assets include loans to customers in the amount of EUR 2.4 billion (31/12/2015:
EUR 2.6 billion). The securities portfolio amounts to EUR 560.8 million (31/12/
2015: EUR 661.0 million).
Kommunalkredit further strengthened its capital position, reporting the equity
in a total amount of EUR 296.8 million (31/12/2015: EUR 256.3 million) and
common equity tier 1 of EUR 225.5 million (31/12/2015: EUR 194.9 million). Thus,
as at 31 December 2016, the bank's total capital ratio came to 42.3% (31/12/
2015: 34.1%) and the CET 1 ratio to 32.9% (31/12/2015: 25.6%); the leverage
ratio as at 31 December 2016 was 7.2% (31/12/2015: 5.0%).
Kommunalkredit has a sound funding structure. In 2016, amounts owed to customers
increased to a total of EUR 552 million (31/12/2015: EUR 383 million). This
increase resulted from the steep rise in customer deposits from EUR 9.0 million
as at 31 December 2015 to EUR 210.8 million as at 31 December 2016. The increase
came from deposits by corporate customers as well as deposits acquired via the
KA Direct online platform. KA Direct is an efficient investment and cash
management product for municipalities and enterprises operating in the municipal
sector.
Outlook
Kommunalkredit has started the new business year from a promising position. The
macro-economic fundamentals and the high demand for infrastructure investments
in Europe create a favourable environment for the bank. Public authorities show
a growing interest in using funds provided by institutional investors to carry
out public infrastructure projects. As a strong and effective bank specializing
in infrastructure finance, Kommunalkredit is strategically very well positioned
in this environment.
After its satisfactory performance in 2016, Kommunalkredit expects to generate
another sound result in 2017, although extraordinary income from the early
redemption of own issues will not be as high as in 2016. Kommunalkredit will
continue to consistently implement its strategy in 2017. The bank's objective is
to increase the volume of its new business as well as the volume of issues to be
placed in the market, especially with institutional investors. As regards
funding, the bank intends to further increase the volume of deposits in 2017, in
line with the positive development seen in the reporting year.
SELECTED INDICATORS OF THE IFRS INCOME STATEMENT
OF THE KOMMUNALKREDIT GROUP
Selected Income Statement
figures 01/01-31/12/2016 6/09-31/12/2015 1)
in EUR Million
Net interest income 36.5 9.3
Net fee and commission 16.8 4.6
income
Net administrative
expenses after services -38.5 -10.2
invoiced to KF
Operating result 15.4 4.1
Net trading and valuation 36.2 1.7
result
Contributions to Bank -2.5 -0.8
Resolution Fund
Stability tax -11.6 -1.0
Consolidated profit for 35.4 4.0
the year before tax
Taxes on income 13.5 1.6
Consolidated profit for 49.0 5.6
the year after tax
Comprehensive income 48.6 5.6
(incl. changes in equity)
1) Owing to the new incorporation of the company as of 26/09/2015,
the figures for the previous year only cover the period from 26/09/2015-
31/12/2015 and are therefore not comparable with the current reporting period
from 01/01/2016-31/12/2016.
SELECTED INDICATORS OF THE IFRS BALANCE SHEET
OF THE KOMMUNALKREDIT GROUP
Assets 31/12/2016 31/12/2015
in EUR 1,000
Cash and balances with 310,457.4 79,693.3
banks
Loans and advances to 101,865.4 240,994.6
Banks
Loans and advances to 2,138,929.0 2,353,017.9
customers
Assets at fair value 91,616.0 752,691.9
Derivatives 337,156.4 544,055.9
Assets 3,790,805.0 4,162,013.8
Liabilities and equity 31/12/2016 31/12/2015
in EUR 1,000
Amounts owed to banks 795,027.9 463,975.7
Amounts owed to customers 552,093.0 383,002.3
Derivatives 263,347.5 427,177.4
Securitised liabilities 1,779,165.4 2,527,894.0
Equity 296,779.0 256,263.8
Liabilities and equity 3,790,805.0 4,162,013.8
Further inquiry note:
Kommunalkredit Austria AG
Martin Hehemann (Corporate Communications)
Tel.: +43 (0) 1/31 6 31-532 oder +43 (0)664/8031631 532
m.hehemann@kommunalkredit.atwww.kommunalkredit.at
end of announcement euro adhoc
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company: Kommunalkredit Austria AG
Türkenstraße 9
A-1092 Wien
phone: +43 1 31 6 31
FAX: +43 1 31 6 31 105
mail: kommunal@kommunalkredit.at
WWW: www.kommunalkredit.at
sector: Banking
ISIN: -
indexes:
stockmarkets: stock market: Luxembourg Stock Exchange, Wien, SIX Swiss Exchange
language: English